Emirates is not only the A380’s biggest customer, it can be argued that the airline is the superjumbo’s only customer that matters.
And what the customer wants, the customer gets. At least that’s what Emirates is hoping for.
Emirates wants an A380 “neo” — a superjumbo with newer, more fuel-efficient engines.
(“Neo” is the designation that Airbus gives to aircraft models that have had their engines and aerodynamics upgraded.)
As Business Insider reported last September, Emirates’ CEO Tim Clark said the airline could order another 60-70 non-neo superjumbos, valued at a whopping $US29 billion, if a new engine option becomes available.
Then in January at the World Economic Forum in Davos, Switzerland, the outspoken airline boss upped that figure to 100 superjumbos with a value of $US43 billion, Bloomberg reported.
Even though Clark essentially told Airbus that “if you build it, we will buy it,” in a January interview with Bloomberg TV, Airbus is still on the fence as to whether it will commit the years of development and billions of dollars to produce a new version of the A380.
While acknowledging Clark’s experience and accomplishments, Airbus sales chief John Leahy told reporters at the
annual conference of the International Society of Transport Aircraft Trading in Phoenix that the decision to produce an updated A380 will be built around sound business reasoning — and won’t be taken by just one airline.
But what a customer Emirates has been for the A380!
Although some airlines have had a hard time filling the seats on the massive double-decker plane, Emirates doesn’t seem to be one of them.
According to Bloomberg, flights on the airline’s fleet of A380s are putting money in the bank. Routes to popular destinations, such as London, are operating at 90% capacity. Emirates is also increasing A380 flights on its US and South Asia routes.
Clark believes upgraded engines could save his airline 10-13% in costs.
This latest development should comes as welcome news to the Airbus superjumbo program.
In short, the A380 is struggling.
Airbus didn’t sell a single superjumbo to an airline in 2014. And Amedeo, the leasing company that did buy 20 A380s in 2014, can’t seem to find anybody to rent them to.
Struggling A380 operator Malaysia Airlines recently leased a pair of superjumbo to Turkish Airlines as part of a trial program to see if the plane can be a reasonable fit for the Istanbul-based carrier. While that’s good news for the A380 program, there are no promises that Turkish Airlines won’t return the planes to Malaysia at the end of the loan.
Fortunately, Airbus has Emirates. Of the 317 A380s ever ordered, 140 of them have been by the official airline of Dubai.
And of the 154 aircraft that have actually been delivered, 58 have gone to Emirates. The airline has even agreed to take delivery of its A380s early, in order to give Amedeo more time to find customers willing to lease the superjumbo.
Which makes Emirates a critical partner in the future of the A380. If Airbus wants to keep its superjumbo program going, it’s going to need Emirates.
And what about that $US86 billion price tag?
That’s just the sticker price. With Emirates quite literally flying the plane on the deal, don’t expect Tim Clark’s airline to pay anything more than a fraction of that amount.
Under the circumstances, that would be a great outcome for both parties.
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